Linda Yaccarino had a priority when she took on the challenging top job at X, formerly known as Twitter: Get advertisers back on board. Now she can point to her first success that bears her unmistakable signature as CEO.
Major brands had abandoned the platform in droves under the prior leadership of billionaire entrepreneur Elon Musk, fearing damage to their reputations if their ads appeared beside toxic content like hate speech. Revenue subsequently plunged by half and the company was four months away from bankruptcy.
Businesses that had previously been keeping the lights on at Twitter felt their justifiable fears were going unheard, after Musk reportedly refused to continue talks with a longstanding “client council” once he bought the company for $44 billion last year. This body served as an important forum for advertisers—responsible for 90% of Twitter’s turnover—to discuss policy, provide feedback, and make them feel more comfortable when buying space on the social media site.
According to the Financial Times, Musk met with the group of ad execs just once in November 2022, but was so unhappy with questions regarding his decision to loosen content moderation policies that he never engaged with the council again.
However, the opinions of advertisers clearly matter to Yaccarino—in fact back in April she publicly grilled Musk on the subject even before she became his employee.
Onstage in Miami at a marketing convention, the former NBCUniversal global advertising executive pushed Musk specifically on what she called the “influence council” and whether it would be restored. Musk refused.
“It’s totally cool to say that you want to have your advertising appear in certain places in Twitter and not in other places, but it is not cool to to try to say what Twitter will do,” he said. “And if that means losing advertising dollars, we lose it. But freedom of speech is paramount.”
Yet in her first TV interview since taking over the helm at X, Yaccarino insisted she had “autonomy” from the Tesla CEO, and then proved it.
Writing on X, Yaccarino said she is “officially bringing back the client council in the fall.”
Excited to continue the momentum in our business and we are officially bringing back the Client Council in the fall. More soon! 💪
— Linda Yaccarino (@lindayaX) August 10, 2023
Musk—usually the first to either announce or confirm new policies at the business—has remained silent.
X did not immediately respond when approached by Fortune for comment.
Proving her independence
Just how much autonomy she enjoys when making decisions independent from Musk is a question Yaccarino gets asked a lot, she revealed.
Speaking to CNBC’s Squawk on the Street, Yaccarino insisted she has the freedom to run the company as she sees fit, despite reports to the contrary.
“Mine and Elon’s roles are very clear,” Yaccarino explained. “It’s pretty straightforward. Elon focuses on product design, he leads a team of extraordinary engineers and focuses on new technology.
“Elon is working on accelerating the rebrand and working on the future. I’m responsible for everything else.”
The close “partnership” between Musk and Yaccarino is a “relay race,” she added: “Elon works on the technology, dreams up what’s next, passes the baton to me, I bring it to market for economic prosperity—not only for our company but for our advertising partners.”
A focus on advertisers has underpinned Yaccarino’s actions in the eight weeks she has been in the post, rolling out a raft of measures in order to tempt back the estranged brands—of which approximately 50% have vanished, according to Musk.
Back to break-even by labeling and limiting “lawful but awful” content
In July the Tesla CEO and SpaceX founder said Twitter, as it was still called then, continued to burn through its cash reserves, posting this is “due to ~50% drop in advertising revenue plus heavy debt load.”
In order to lure advertisers back, Yaccarino signed a new ad-tech partnership just last week with Integral Ad Science (IAD), a company that offers safeguards to ensure advertisers’ posts won’t appear beside controversial content.
In her CNBC interview on Thursday, Yaccarino insisted X had furthermore deployed new brand safety and content moderation tools “that have never existed before at this company,” as well as confirming a new “de-amplification” policy.
“We’ve introduced a new policy…called freedom of speech, not reach,” she explained. “If you’re going to post something that’s illegal or against the law you’re gone, zero tolerance. But more importantly if you’re going to post something that is lawful but it’s awful you get labeled.
“You get de-amplified, which means it cannot be shared, and it is certainly demonetized.”
The tactics are all a bid to get the company back to profit—with Yaccarino confirming in the interview that the company’s turnaround has almost reached the point of breaking even: “We’re pacing well.”
The CEO added she believes the “future is bright” for the company—buoyed by encouraging meetings with blue-chip brands.
